Tax is not a window into the soul

The weird belief that tax receipts are a mark of character is fuelling the pursuit of Jimmy Carr.

T

25 June 2012

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There is something more than a little hysterical about the current game of hunt the tax avoider being played by Britain’s political and media class. No sooner has one suspect been metaphorically chucked down a well to test whether they are indeed a wicked dodger than the tax-collecting general has moved on to single out further potential evildoers.

Last week, it was the turn of stand-up comic Jimmy Carr to be publicly vilified for legally, albeit sneakily, reducing the amount of tax for which he was liable. Never one to stay off a passing bandwagon, up hopped UK prime minister David Cameron with some thoughts ‘particularly [for] Jimmy Carr’: ‘some of these [tax avoidance] schemes we have seen are quite frankly morally wrong’, he said sternly. Condemnation and reprimand duly issued, and a painful apology on Twitter from Carr in the bag, the tax-collecting mob moved on. Next up it was the members of bloke-band, Take That, including the recently gonged Gary Barlow, OBE. Apparently, Take That had channeled some £26million of earnings through another cheeky scheme to avoid paying a full whack of tax.

Then, over the weekend, it was the turn of medal-laden Olympic cyclist Sir Chris Hoy. Evil man that he is, he had received a loan from his own company, which he had then paid back. Or something. Whatever it was he did, it hardly seemed like the most heinous deed in the world. Still, the finger-pointing was enough for Hoy to feel it necessary to issue a statement: ‘I take my responsibilities as a taxpayer as seriously as I do as an athlete’, he said, before adding ‘My income-generating activities are organised through a UK-registered tax-paying company. This means that my financial affairs are transparent and in the public domain.’

Who is next, one wonders? There are no doubt some rich celebrity pickings to be found in the tax-reducing schemes set up around film-production companies, wherein investors can take advantage of film-industry tax breaks by plunging their money into a film company before withdrawing it as a loan. Yet, while politicians and pundits are polishing their pitchforks, few seem willing to question the shrill, vindictive nature of this current obsession with tax avoiders.

Taxation has been an inflammatory issue in the past. For instance, the refusal of American colonists to pay the British government’s increase in stamp duty during the 1770s, on the grounds that the colonists were not represented in parliament, is seen as one the key moments preceding the American Revolution. And more recently, in 1973, Labour’s then shadow chancellor Denis Healey gave his now notorious ‘pips squeak’ speech in which he said: ‘there are going to be howls of anguish from the 80,000 people who are rich enough to pay over 75 per cent on the last slice of their income’.

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But the current obsession with tax avoidance is different. There does not seem to be a political issue at stake, exactly, be it liberty or some grand redistribution strategy. In fact, instead of being political, today’s high-pitched denouncing of wealthy people and their oh-so-clever accountants is almost entirely personal. The attacks, for instance, are largely aimed at individuals, from Carr to retail king Sir Philip Green. This is why the language deployed by commentators and politicians alike is moralising, not political. The target is individual behaviour, not systemic change. In this context, taxation has become the means through which certain types of behaviour are stigmatised and particular lifestyles branded as wrong. In the words of a Financial Times editorial: ‘Well-off celebrities slipping a few million quid into an offshore tax scheme have come to be seen as no better than expense-fiddling MPs or overpaid chief executives. As the pain of austerity has started to be felt, so tolerance of such foibles has evaporated.’

‘Foibles’ is an interesting word choice - failing or a weakness, usually of a personal nature. This is how one’s tax receipts are now being interpreted: as an indicator of one’s character, of whether it is rife with weakness and failings. An individual’s tax arrangements have, incredibly, been turned into an index of one’s moral goodness. Show a willingness to pay X amount above a certain amount earned - regardless of what the state might actually spend said revenue on, be it Trident nuclear missiles or the war in Afghanistan - and you are a good person. Find a way to reduce your liability, for whatever reason, and you are a bad person. Little wonder that one of the Guardian’s most arch commentators felt that tax receipts revealed a great deal about a person’s moral character: ‘I’m endlessly intrigued as to how [politicians] manage their private finances because of the window it offers into their legislative soul – or lack thereof.’

Underwriting this unquestioned conviction that paying a lot of tax marks you out as a good person, a liberal, lefty equivalent of one of Calvin’s elect, is the broader, longer-standing attack on wealth and consumption. The desire, not to mention aspiration, towards ever-higher material standards of living is seen by too many as the source of all that is wrong in the world, from the ever-imminent, never-to-be-glimpsed environmental apocalypse to the economic crisis itself. An aversion to high rates of tax is seen as an aspect of this fundamental form of modern sin.

The solution, as some have proffered, is ‘universal transparency’ of tax and income. ‘Stripping off the veil of financial modesty would be a shock at first’, wrote Polly Toynbee earlier this year, ‘but we would get used to earnings and taxes belonging in the public realm, not the private one – wills are already public documents. What is there to hide, except dishonesty or moral shame at earning multiples more than others who work as hard or harder?’

Despite the rhetoric, there is nothing moral about shaming people into paying a lot of tax. If there was a debate about taxation, about its role, then that would be one thing. But there’s no debate here. This is all about austerity etiquette, of celebrating its adherents and damning the high-earning, tax-reducing deviants.